2 Weld residents face prison, fines for alleged tax fraud

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Two residents of Weld County have been arrested and indicted by a federal grand jury on accusations of tax fraud and evasion, according to a news release from the U.S. Department of Justice.

Timothy Hershey, 50, of Gilcrest, is alleged to have conspired with Renee Molinar, 46, of Johnstown, to hide income generated from Johnstown Liquor, 21 S. Parish Ave. in Johnstown.

According to the release, Molinar was listed as the owner of the business, but Hershey controlled the operation of the store.

The indictment alleges Molinar and Hershey conspired to keep cash income from being disclosed to the Internal Revenue Service from 2001 to 2010, according to the release. Hershey did not file federal income tax returns or make payments to the IRS during that time, according to the release.

The indictment also alleges Molinar sent payments to the IRS during that time, but she did not file returns to explain the amounts, according to the release. The payments were roughly consistent with what she may have earned as an employee at the store rather than as the sole owner, according to the release.

Molinar was confronted in 2008 by an IRS agent about her failure to file federal returns, according to the release, and she eventually filed returns for 2005 and 2006. According to the release, Molinar listed herself as the owner of the store and “substantially understated” the gross receipts of the business, according to the release.

In addition to failing to disclose revenue, the indictment alleges Hershey instructed Molinar to pay some employees in cash only, and thus employment taxes were not withheld from their wages, according to the release. Hershey then told those employees not to file tax returns, according to the release.

Hershey further attempted to conceal his control of the store from the IRS by arranging for residential properties and businesses to be purchased in the names of others, according to the release.

Molinar was charged with conspiracy to defraud the United States and faces a maximum of five years in prison and a $250,000 fine.

Hershey faces the same charge and 10 additional counts of tax evasion, which could result in a maximum of five years in prison and a $100,000 fine for each count.